Rev. Rul. 84-158

ISSUE

What identifying number must a partnership request from an individual nonresident alien limited partner for purposes of complying with the requirement of section 6109 of the Internal Revenue Code to furnish identifying numbers on returns, statements or other documents?

FACTS A is a nonresident alien limited partner in a partnership engaged in business in the United States. A derives income from the partnership and is required to file Form 1040NR, U.S. Nonresident Alien Income Tax Return. The partnership is required to file returns, statements, and other documents for which an identifying number for A is required.

LAW AND ANALYSIS

Section 6109(a) of the Code provides that, when required by regulations prescribed by the Secretary: (1) any person required to make a return, statement, or other document must include an identifying number (2) any person for whom a return, statement, or other document is required by another person must furnish to that other person an identifying number, and (3) any person required to make a return, statement, or other document with respect to another person must request from the other person, and must include in the return, statement, or other document the identifying number of the other person.

Section 6676 of the Code imposes a penalty of $5 for each failure of a person to include his or her taxpayer identification number in any return, and a $50 penalty for each failure to furnish a taxpayer identification number to another person and for the failure to include the identification number of another person in any return for the other person. The total amount imposed on a person for all failures during any calendar year may not exceed $50,000.

Under section 6109(d) of the Code, the social security account number issued to an individual must be used as the identifying number for that individual, unless otherwise specified under regulations by the Secretary.

Section 301.6109-1(a)(1) of the Regulations on Procedure and Administration provides that social security numbers (000-00-0000) identify individual persons and estates of decedents, while employer identification numbers (00-0000000) identify corporations, partnerships, nonprofit associations, trusts, and similar nonindividual persons. Both types of taxpayer identifying numbers are used by individuals who are employers or who are engaged in a trade or business as sole proprietors, as required by returns, statements or other documents and their related instructions. Such documents often require an individual's own social security number in connection with individual taxes, and employer identification number in connection with business taxes.

Under section 301.6109-1(g) of the regulations, nonresident aliens, foreign corporations, foreign partnerships, or foreign private foundations, that do not have income effectively connected with the conduct of a trade or business within the United States, and do not have an office or place of business or a fiscal or paying agent in the United States, are not required to have identifying numbers.

Under section 875(1) of the Code, for purposes of income taxation of nonresident aliens under section 871, a nonresident alien individual or foreign corporation shall be considered as being in a trade or business in the United States if the partnership of which such individual or corporation is a member is so engaged.

Ordinarily, the social security number assigned to an individual is the number used to identify that individual. The exception is in the case of an individual who is engaged in a trade or business as a sole proprietor. Under section 301.6109-1(a)(1) of the regulations, that individual must secure an employer identification number. However, an individual considered engaged in a trade or business under section 875(1) of the Code is not considered engaged in a trade or business as a sole proprietor for purposes of the exception from securing a social security number provided by section 301.6 109-1(a)(1) of the regulations.

Further, the exception from securing any identifying number under section 301.6109-1(g) of the regulations does not apply because A has income effectively connected with the conduct of the business of the partnership in the United States.

HOLDING

A partnership, which is required to file returns, statements, and other documents for which the identifying number of its individual nonresident alien limited partner is required, must request the partner to furnish his or her social security number.